Pretty much all anybody is talking about today is “Brexit” -- the surprising results of yesterday’s vote for Britain to exit the European Union. So we will too.
What does Brexit mean for the technology community? A bunch of publications have weighed in, and we’ve rounded up the smartest articles we’ve read about this potentially world-changing development by the people of the United Kingdom.
Wired writes that “policy, regulation, trade, and science funding will all be hit by the UK's decision to leave the EU.” 18.3% of funding to academic researchers at British universities comes from the European Union; that’s gonna leave a mark. Many tech regulations are derived from EU legislation and will need to be renegotiated. None of Britain’s private companies valued at more than $1 billion supported leaving.
The Financial Times says that Britain’s tech community is “shell-shocked” by the results, making “entrepreneurs and investors worried about the long-term access to talent and the single European market.” The distinctively peach-colored paper notes that more than 40% of Europe’s startups valued at $1bn or more are HQ’d in the UK, and after the hyperbolic headline and open paragraphs, provides its usual welcome balance by quoting numerous entrepreneurs who point out ways leaving could benefit the tech community because of the EU’s “big bureaucracy” and “nonsense laws and directives” that are a “burden.”
Fortune magazine reminds us that Brexit isn’t going to happen immediately, and probably won't be completed until 2018. While this should defer any immediate panic, it also means years of uncertainty, as tech companies and their investors won’t know for sure how regulations will (d)evolve in both the UK and EU. The article notes Brexit could be bad for the U.S., as it will give France and Germany even more leverage, and both of those countries have taken much harsher positions than the U.K. in cracking down on American tech firms for perceived transgrssions.
The Guardian sought out tech company CEOs who say they may actually move out of the UK because of the “Leave” vote. Wait, actually they only found one who actually exit. That said, all fourteen of the billion-dollar tech firms based in the UK the paper queried claimed Britain leaving the EU would be bad for their business.
As an example of the ripple effect to a country outside the EU, India’s The Hindu newspaper says the vote brings anxiety to that country’s IT sector. The UK makes up 17% of the Indian IT industry’s export revenue, and the likely decline in the British pound (down 10% the day after, so far) will turn many existing contracts into financial losers. It also means many Indian IT companies may need to establish separate headquarters/operations for the EU, a hassle that could lead to some disinvestment from UK.
The general consensus seems to be: It’s bad, but probably not as bad as the most histrionic critics are saying. Moreover, it’s going to be a slow unraveling over two years or so. Finally, the vote needs to be approved by British Parliament, which is no done-deal -- Greek voters chose exit (or "Grexit") last year, but were trumped (ahem) by the politicians. We might well be writing a “what does the Parliament veto of ‘Brexit’ mean for Tech?” in a couple months.